Why Does Larry Page Pay Himself a $1 Salary?

July 8, 2024 No Comments

A: Co-founder and current chief executive officer (CEO) of Google Larry Page has been paid an annual salary of only $1 every year since the company went public. Though the practice of limiting the top executive’s salary is not widespread, Page is not alone. His

Which of the following statements are true with respect to price-earnings (P/E) multiples …

July 8, 2024 No Comments

Q: Which of the following statements are true with respect to price-earnings (P/E) multiples? I. During a recession, P/E multiples will generally increase. II. As the growth prospects of a company increases, holding everything else constant, its P/E will also rise. III. As the required

Which of the following statements are true with respect to the coefficient of determination …

July 8, 2024 No Comments

Q: Which of the following statements are true with respect to the coefficient of determination? I. Coefficient of determination and correlation coefficient must always have the same algebraic sign (i.e. plus or minus). II. As the sum of squares of the error terms increases, coefficient

Who benefits the most from prepaid expenses?

July 8, 2024 No Comments

A: Prepaid expenses benefit both businesses and individuals. Prepaid expenses are the types of expenses that are bought or paid for in advance. Examples of these are insurance, rent and subscriptions. In general accounting, these are the supplies or services that the company has acquired

What is a trailing commission?

July 8, 2024 No Comments

A: Very simply, a trailing commission is money you pay an advisor each year that you own an investment. The purpose of the fee is to provide incentive for the advisor to review his clients’ holdings and to provide advice. But when it comes down

What is an IPO lock-up period and how long is it?

July 8, 2024 No Comments

A: An initial public offering (IPO) lock-up period is a contractual restriction that prevents insiders who are holding a company’s stock, before it goes public, from selling the stock for a period usually lasting 90 to 180 days after the company goes public. Insiders include

What is authorized stock?

July 8, 2024 No Comments

Authorized stock represents the maximum number of common shares that can be issued legally by the company as stated in the company’s charter. The number of authorized shares that is identified in the company’s charter often greatly exceeds the number of shares that is issued

What is real estate underwriting?

July 8, 2024 No Comments

A: When an individual or business entity seeks funding for a real estate project or purchase, the loan request is scrutinized by an underwriter to determine how much risk the lender is willing to accept. These types of underwriters are not to be confused with securities

What is the difference between a principle agent problem and moral hazard?

July 8, 2024 No Comments

A: Principal-agent problems and moral hazards are related in that one gives rise to the other. Principal-agent problems occur when the principal of an entity hires on a company or individual employee to complete designated tasks that have a tendency to solely benefit the principal

What is the difference between an investment and a retail bank?

July 8, 2024 No Comments

A: The activities and types of clients for an investment bank versus those for a retail bank highlight the primary difference between the two institutions. Retail Banks Retail banks primarily focus on taking deposits and making loans to individual customers as well as offering other

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